<p><pre><code> "Over and over again courts have said that there is nothing sinister in so arranging one's affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant."
- Commissioner v. Newman, 159 F.2d 848, 851 (2d Cir. 1947)
</code></pre>
I don't hate Nike or Amazon for paying no tax. I hate our tax laws for making it possible to do so legally. The previous administration spent tremendous energy cutting taxes for corporations and when they actually take advantage of that fact it's a bunch of shocked pikachus.
While I think our tax laws for corporations need adjustment I always take these headlines with a grain of salt.<p>Let's think about taxes in other areas that companies like nike generates:
1. Sales tax on goods sold
2. Income taxes on employees pay
3. Capital gain taxes on stock sold... At ever increasing prices because their earnings are higher.<p>All I'm saying is it's complicated. It's not a simple math. Lowering corporate taxes might stimulate growth and taxes in other areas.
It's always weird to me that people see this and get angry at Nike and not the politicians who made the laws.<p>Nike is a publicly traded company whose sole purpose of existence is to create profits for its shareholders.<p>The people who write the tax laws are democratically elected officials whose, at least on paper, sole purpose as an official is to create laws like tax laws that benefit their constituents.<p>And yet, people somehow see the problem here as Nike trying to do what's in their best interest and not the politician who made it totally legal for them to do what they are doing.
Corporations should not pay income tax at all. It's a direct tax on savings and investment, which leads to slower growth and lower incomes for the country as a whole. S Corps and some other legally structured corporations (such as some LLCs, all "non-profits" and religious businesses) don't pay income taxes by design. Why should C corps be singled out to pay taxes on capital that could be reinvested?<p>If you really want a fair, progressive tax system, stop taxing corporations, and increase dividend and capital gains* tax rates back to ordinary income tax rates. Then for the first time the little old lady in retirement would pay low rates and the rich CEO would pay much higher rates.<p>Under the current system when the retiree in California living off $30k in annual retirement income gets a dividend a total of roughly 38% is lost to taxes (Federal Corporate Capital Gains, Federal Dividend tax, State Corporate Income Tax, & State Personal Income Tax). The CA CEO making a million dollars a year loses roughly 47% to taxes on that same dividend.<p>So that's what our progressive income tax system was intended for, to have the poorest paying 38% and the richest 47%? And all to discourage savings and investment?<p>*
Now you'd have to index capital gains for inflation if you reverted them to ordinary income tax rates. That's the reason we have a separate capital gains rate. Taxing someone on a 100% gain in their stock value when inflation was 100% during the same period would be taxing imaginary gains.
When a similar story came out about Amazon last year, it seemed that the main explanation is that this was due to increased employee compensation which in turn increased employee income tax (which is at a higher rate than corporate income tax). In theory this is better for all parties involved since employees are getting more income and govt gets more tax income, but the article was a bit short on details so I couldn’t tell if that was also happening here.
The cited report is probably a better link. Posted article doesn’t add much value IMO, and it omits valuable information about the specific tactics these companies used for tax avoidance. <a href="https://itep.org/55-profitable-corporations-zero-corporate-tax/" rel="nofollow">https://itep.org/55-profitable-corporations-zero-corporate-t...</a>
This is probably naive (and feel free to tell me why it is), but why have corporate tax at all? Why not only tax individual income? It seems much easier for corporations to dodge taxes by moving their domicile and such things. Much harder (or at least a lot more inconvenient)for individuals to move jurisdictions to dodge taxes or to have other complex avoidance strategies (particularly if the tax code were simplified).
Good.<p>We should keep corporate income tax 0% forever, and take the tax revenue via capital gains (or dividends) instead. That's a lot simpler, fairer, and stops funneling money into the lawyers devising corporate taxation strategies that make the tax useless in the first place.
Article is missing a lot of information - Like why with a 21% rate companies didn't pay taxes, or , what was the 'tax rebate' for? Also it shows the stock price change as if the company get's that money. Companies only get the initial IPO money for shares sold.<p>Taxes are passed through to consumers anyway; Corporations don't pay taxes - they collect them from the customer.
So, if I am reading this correctly:<p>A combination of the Trump corporate tax cut and rebates on past losses in the CARES act, as well as other existing rebates, are reducing taxes that many companies have to pay this year, in some cases all the way to a negative effective rate.<p>Increases in share prices have also pushed up CEO pay, since CEOs receive a lot of stock as part of their total comp.
Oh man, they would have paid $8.5 billion in corporate income taxes.<p>That'll for sure plug the trillions extra we spent in the past 12 months, the $2 trillion laughble infrastructure plan that does nothing, our forever trillion dollar entitlement deficits and hundreds of billions in unnecessary military spending. We better immediately get on raising corporate income taxes on every business - which is what this article is ideologically timed to argue in favor of.<p>And then a lot more of our major corporations will flee the US, as they were beginning to prior to bringing the corporate income tax down to a sane level that is competitive. They'll take jobs and R&D with them, while making the rest of the world even more competitive; see: Medtronic (and Pfizer nearly joined them). So then you'll have to strap another layer of authoritarianism onto the increasingly unfree US and say that companies are no longer allowed to leave (de facto building walls to keep resources from fleeing bad policy and decades of wildly irrational spending).<p>The only place the US is going to find a lot more income tax, is from the middle class tax bracket and those above it. And that still won't come close to dealing with the deficits. Those brackets are where every other welfare state on the planet finds their income tax revenue, the US is one of the few exceptions that doesn't drown its middle class in taxes, and if we're going to do that we better give those people healthcare in exchange among other things (like nice infrastructure, high-speed rail, and so on). But we won't do that, we'll drown everyone in taxes and give them nothing further in return, we'll just keep running our worst-in-the-world welfare state instead, as we have been.